I like the free GeoLite City from Maxmind which works for most
applications and from which you can upgrade to a paying version if it's not precise enough. There is a PHP API included, as well as for other languages. And if you are running Lighttpd as a webserver, you can even use a module to get the information in the SERVER variable for every visitor if that's what you need.
I should add there is also a free Geolite Country (which would be faster if you don't need to pinpoint the city the IP is from) and Geolite ASN (if you want to know who owns the IP) and that finally all these are downloadable on your own server, are updated every month and are pretty quick to lookup with the provided APIs as they state "thousands of lookups per second".
